Fannie Mae seeks new $8.4 billion US bailout to stay afloat
US mortgage finance giant Fannie Mae said Monday it needs an additional government bailout of 8.4 billion dollars after reporting a 2010 first-quarter loss of 11.5 billion dollars.
“Our first-quarter results were driven primarily by credit-related expenses, which remain at elevated levels due to weaknesses in the economy and the housing market,” the company said in a statement.
The results showed improvement from the 2009 fourth quarter, when the loss stood at 15.2 billion dollars, the firm said, reporting its results in newly adopted accounting standards.
But the company, which with sibling mortgage finance giant Freddie Mac was seized in a government rescue in September 2008 amid an escalating financial crisis after the collapse of a housing bubble, said it ended the first quarter with a net worth deficit of 8.4 billion dollars.
Fannie Mae and Freddie Mac guarantee more than 40 percent of the home loans in the United States.
Hammered by the global financial crisis and the US recession, the two publicly owned firms were bailed out at a cost of up to 200 billion dollars by the Treasury Department at the time.
Fannie Mae said Monday that its 2010 first-quarter net loss attributable to common stockholders, which included dividends on Treasury-held preferred stock, was 13.1 billion dollars.
The additional 8.4 billion dollars in aid requested would bolster 15.3 billion dollars in aid already provided by the Treasury on March 31, aimed at preventing the failure of a key pillar of the US real-estate market.
Freddie Mac last week reported a first-quarter net loss of 7.98 billion dollars and asked for 10.6 billion dollars in additional Treasury aid.